Draftkings Reignmakers

[Cambruin]

For Draftkings Reignmakers "winnings" they send you a 1099 Misc.

Entering that # in TurboTax in the "other" income section (where it belongs) doesn't give you an option to select gambling losses to offset the "winnings". There has to be a way to deduct the cost of the contests, otherwise I lost money on the contests AND have to pay taxes on the money I got back which was substantially less than I put in. Doesn't qualify as a business so can take the deduction in Schedule C.

Any suggestions? Thank you!

[AliciaP1]

You can only deduct your gambling losses up to the amount of your winnings if you itemize your deductions on Schedule A of your tax return.  

Per the IRS:

Gambling Losses

You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as "Other Itemized Deductions."

[Cambruin]

Thank you for the reply. I understand the ability to offset gambling winnings with losses etc. The problem is since the winning were reported on a 1099-Misc. they have to be reported in the "other" income section or the automated IRS cross check will think I didn't report the income correct?

The W-2G section where it actually lets you claim a gambling loss won't let me do that because the income was reported in the 1099-Misc section and not in the W-2G section. The deduction section won't let me deduct a gambling loss from another income section. 

[DawnC · Accepted solution]

You can enter the amount from your 1099-MISC in the gambling winnings section.   It will first ask you if you received a W-2G for your winnings.   After you answer No, it will ask you about winnings not reported on a W-2G (report the amount of your 1099 plus ALL other winnings not reported on W-2G).   After that, you can enter gambling losses and if your itemized deductions are more than your standard deduction, the losses will be included on Line 12 of Form 1040.   

As noted above, you must keep detailed records of your gambling winnings and losses in case you receive any inquiries.   Entries you make in the gambling winnings section and entries you make for 1099-MISC prize winnings both go to Line 8 of Form 1040.   

Claiming Gambling Losses on Form 1040 - this article has a lot of good information on both recording keeping and deduction limitations.   You can include in your gambling losses the actual cost of wagers plus other expenses connected to your gambling activity, including travel to and from a casino.  Keep in mind that the IRS does not permit you to simply subtract your losses from your winnings and report the difference on your tax return.